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EDITOR, Daily News:
On Oct. 23, the Legislature will convene for its third special session to discuss potential revenue sources. Below, I have outlined two options that I will most likely have the choice to vote on during that session.
Proposed by Gov. Walker, the first proposal is a flat rate tax of 1.5 percent, paid by everyone earning wages or self-employment income in Alaska. This includes non-residents and partnership earnings. Retirement related income will not be taxed. There is a maximum tax amount, which is twice the previous year’s Alaska Permanent Fund dividend. For example, the tax would be capped at a maximum of $2,200 if we base it off this year’s $1,100 PFD. If we follow through with this plan, the Legislature will most likely make changes and amendments. It would go into effect in 2019 and is estimated to bring in $320 million in revenue. In order to fully close the deficit, modest cuts and small draws from savings would continue as a supplement to the tax.
In lieu of a new source of revenue, the second plan favors more cuts. We have cut our budget drastically over the past five years — our FY2018 budget is 45 percent smaller than FY2013 — but we still have at least a $2.4 billion deficit. Our current status quo is to make cuts and pull from savings, and this plan would simply deepen those cuts and continue to pull heavily from savings in order to cover the deficit. If adopted, the cuts might look similar to the Senate’s deep-cut plan proposed earlier this year, which included heavy cuts to education, the Pioneer Homes, the Alaska Marine Highway System, and the PFD.
I greatly appreciate your input on what you think is best for you, your family, our community, and for Alaska as a whole. I have created a survey to gather preferences, thoughts, and suggestions on the upcoming session. You can find the survey at www.surveymonkey.com/r/MXKPQQD. You can also tell me which option you prefer by emailing me at Rep.Dan.Ortiz@akleg.gov.
REP. DAN ORTIZ
House District 36